The Ministry of Finance has convened the Political and Fiscal and Financial Council (CPFF) next Monday, December 11, to approve the new deficit path that the regional governments will have in view of the 2024 general budgets, which the Government wants to have ready in the first quarter of the year.
This is an important step to continue with the progress of the next general budgets, although the Council of Ministers must also approve the spending ceiling and the deficit objectives for the coming years.
The instructions for preparing the new accounts have already been approved and the Government has to design a path of stability – which, according to what it advanced to Brussels in October, involves lowering the deficit to 3% of GDP in 2024 – and projecting it into the spending ceiling, which It is the key piece for preparing future accounts.
The CPFF is held on the same day as the date for the different ministries to send their budget proposals to the Ministry of Finance.
That Monday the Minister of Finance, María Jesús Montero, will follow a broken down deficit path to set the objectives of the autonomous communities, Social Security and the State, and although the PP governments oppose it, the Executive has the casting vote for its final approval.
According to the budget stability law, this path has to be sent to the Cortes for approval in both chambers and this is where the Government faces a major obstacle: the PP has an absolute majority in the Senate and does not seem willing to endorse the deficit targets.
However, sources close to the Ministry emphasize that even if the Senate “overthrows” the deficit objectives, “the budgets will be formulated because we have the support of legal certainty.”
The Treasury rules out “right now” a reform of the Stability Law that would allow the Senate’s veto of the deficit path to be circumvented, although it recognizes that it must be done in the future.
The Ministry is convinced that the 2024 budgets will be released and remember that the objectives have been agreed by Brussels, while at the same time they emphasize that without General Budgets the regional governments cannot prepare their regional accounts.
On the other hand, once the budgets are on track, in parallel an attempt will be made to modify the regional financing model, although sources close to María Jesús Montero indicate that the PP has to come in.
“Feijóo must open up that possibility,” they emphasize while regretting that regional presidents such as Isabel Díaz Ayuso in Madrid, the president of the Xunta de Galicia, Alfonso Rueda and the Andalusian president, Juan Manuel Moreno, “are in top positions and not “they want to give in.” EF
